US President Donald Trump and China's President Xi Jinping shake hands after making joint statements at the Great Hall of the People in Beijing on November 10, 2017. Photo: Reuters/Damir Sagolj

US President Donald Trump’s first series of long-promised tariffs on imported products came on Tuesday, underwhelming markets, with even directly affected firms shrugging off the decision.

Bloomberg reports on the minimal impact of the trade action:

  • South Korea’s LG, which was hit by the 30% duties on washing machines, pared losses on Tuesday trading; China’s biggest solar panel maker, JinkoSolar, said the outcome is “better than expected”
  • The share of GDP of these types of household equipment is “essentially 0.1%, at maximum”; the economic impact from tariffs is not material: Trinh Nguyen, former World Bank consultant and senior economist at Natixis SA
  • Analysts say the only cause for concern is whether or not this is a sign of more things to come
  • Whether or not China responds with a warning shot to dissuade more significant action is also in question

China has plenty of options to retaliate:

  • Specific US companies, industries at risk for retaliation include Apple, Boeing and soybean exports
  • China has long history of tit-for-tat retaliation in trade disputes
  • Nationalist tabloid Global Times said China should not let the US get away without paying a price for “making unreasonable demands”; China can sell US Treasuries, restrict imports on agricultural products, machinery and aircraft, the paper warned

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